Keeping car showrooms closed ‘costs £61m every day’

Keeping car showrooms closed costs the Treasury £61 million every day, according to a trade body (Fiona Hanson/PA).
Picture:
PA

An automotive industry trade body said the figure is a combination of lost tax revenue and the cost of furloughing retail staff.

Keeping car showrooms closed costs the Treasury £61 million every day, according to a trade body.

The Society of Motor Manufacturers and Traders (SMMT) published the figure as it declared the automotive industry is “ready to return to work”.

It calculated that the amount of tax revenue lost from every additional day showrooms are closed is worth £20 million, while furloughing the sector’s 590,000 retail workers under the job retention scheme has an estimated daily cost of £41 million.

The SMMT claimed that restarting the new car market can help take the pressure off public transport as more people return to work.

It insisted that manufacturers and retailers have been working hard to implement comprehensive measures “to ensure the safety of customers and staff during every interaction”, from browsing and vehicle demonstrations to test drives and transactions.

SMMT chief executive Mike Hawes said: “Government measures to support the critical automotive industry during the crisis have provided an essential lifeline, and the sector is now ready to return to work to help the UK rebuild.

“Car showrooms, just like garden centres, are spacious and can accommodate social distancing easily, making them some of the UK’s safest retail premises.”

New automotive sector-specific guidance for retail, manufacturing and aftermarket has been published by SMMT, with comprehensive COVID19 safety measures.

Garden centres have been permitted to reopen in England, Wales and Northern Ireland as part of the easing of coronavirus lockdown restrictions.

Mr Hawes went on: “Allowing dealers to get back to business will help stimulate consumer confidence and unlock recovery of the wider industry, boosting tax revenue and reducing the burden on Government spending.

“Unlike many other retail sectors, car sales act as the engine for manufacturing, and reopening showrooms is an easy and relatively safe next step to help get the economy restarted.

“With every day of closure is another day of lost income for the industry and Treasury, we see no reason for delay.”

A spokesman for the Department for Business, Energy and Industrial Strategy said: “As the Government has set out, the reopening of non-essential retail like car showrooms should begin in a phased manner from June 1, subject to the scientific evidence. We have published clear guidance to ensure workplaces can open in a safe way when the time is right.

“Currently, car showrooms can continue to sell cars remotely and deliver cars, as long as they follow guidance from Public Health England.”